Montgomery Quoted on EPA’s Power Shift to the States with New ACE Rule

Partner Jane Montgomery was quoted on potential legal battles the U.S. Environmental Protection Agency (EPA) may face as a result of its new Affordable Clean Energy (ACE) rule as well as whether the agency has the authority under Section 111 of the Clean Air Act (CAA) to regulate greenhouse gas (GHG) emissions beyond the fence of a power plant.

Jane said that, based on how Section 111 is written, the EPA is on solid legal ground.

“[Section 111] is not written as an overall policy objective, it’s written as a source control rule,” Jane said. “If the [ACE] rule directs sources to [install] certain types of controls to reduce pollution, then it’s a rule that appears to be within the authority of Section 111.”

Notably, the ACE rule does not make changes to the EPA’s New Source Review (NSR) program, which requires industrial facilities to install modern pollutions control when emissions increase. However, some experts think that the heat-rate efficiency improvements allowed under the ACE rule may increase non-GHG emissions, which could trigger NSR review.

Jane said, “That is very unit-dependent. Every unit has a different rate at which each of its pollutants are emitted.”

The new rule may also set the stage for state-level legal issues if the emissions allowed under the ACE rule don’t comply with a state’s own requirements.

“They’re going to be messy,” Jane said. “In a way, EPA has kicked the can down the road to the states and the states have to figure out a way around it.”

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